Art tax to 'force sales overseas' February 16, 2005 Britain's expanding contemporary art market is likely to lose out to the US when a new levy comes into effect next year, according to a report.BBC news

The levy has received sharp criticism from the art industry

The charge, known as droit de suite, will be paid by the seller of a work of art to the artist or their heirs up to 70 years after the artist's death.

It also found the levy will overwhelmingly benefit artist's heirs.

The European Fine Art Foundation (EFAF) research is the first into the effects of the European Union levy.

Many fear the levy, which comes in on 1 January 2006, will force vendors out of the UK in favour of non-EU countries like Switzerland and the US.

The EFAF research showed that in 2003 more than 60% of sales exceeding 200,000 euros (£137,657) were made in New York, while the UK accounted for 27%.

However, the six European states already imposing the re-sale levy accounted for only 7.4% of worldwide sales.

CRITICISM

In the higher price bracket, sales were found to be concentrated in locations where the charge is not currently levied.

The EU directive has received fierce criticism from the government and many in the art industry.

According to the research, if droit de suite had been collected on all auction transactions in the EU in 2003, heirs of dead artists would have received 81% of the proceeds.

It also showed that the number of living artists who stand to gain from the levy is considerably less than previously thought, with almost three times as many works being sold by dead artists.

Droit de suite will be charged on works of art by living artists being resold in Britain next year for more than 3,000 euros and on art produced by artists who have been dead for up to 70 years from 2012.